ABSTRACT

This paper aims to analyze the influence of the real exchange rate (RER) and the technological gap on economic growth. It was found that the maximum relationship between RER and growth is influenced by the technological gap. Still, the reduction of the technological gap, provided by improvements in human capital and an increase in the stock of knowledge, can lead to an increase in growth, either through structural changes or by improving extra-price competitiveness. Thus, it was possible to observe new channels to which devaluation and reduction of the technological gap can lead to a new process of cumulative causality.

KEYWORDS:
Real exchange rate; Technological gap; Structural changes, and growth